CA: Are you saying that every city now has at least one
retailer that carries La Gloria Cubana?

Carrillo: No, there are a lot of cities, especially in the
Midwest and on the West Coast, that don't have them. There are a lot
of places that still don't carry La Gloria Cubana.

CA: How does my reader, who wants your cigar, get your
cigar?

Carrillo: That's a good question and frankly, I know we
have to expand and spread the cigars to different cities. But I want
to give these people who have been waiting for me all this time, some
reward.

CA: If a consumer calls your office on the phone, will you
send them the list of stores around the country that carry your
cigars?

Carrillo: If they call, what we'll do is tell them they can
get it at such and such a store. The problem that we had is when the
consumer goes to the store, he finds that the retailer is out. When a
retailer gets a batch of La Gloria Cubana, they sell out within two to
three days. It's a real problem for the retailer and myself because
you usually end up with an upset customer.

CA: As a curiosity, when you ship to a retailer, how many
boxes are in an order?

Carrillo: We average, depending on the size, from 40 to 50
boxes. But it can range from 30 boxes to about 120.

CA: And how many times a year might they get that?

Carrillo: About four times a year.

CA: So even though the retailer is in St. Louis or Memphis,
he's going to get his shipments?

Carrillo: Yeah, it's a steady thing. We rotate. It's
something they're going to get whether they call or not.

CA: People found two things attractive about La Gloria
Cubanas: it is a well-made, rich-tasting cigar and it was reasonably
priced. Today, costs have gone up. The growers want more, you've built
a new factory, you're doing a lot more. Have you adjusted your prices,
for instance on a Wavell?

Carrillo: Three years ago, I think it was $1.95. If I'm not
mistaken, now it's about $2.85.

CA: $2.85. Are you going to continue to increase prices?

Carrillo: I don't know, I try to keep the prices as low as
possible. What I try to do is cut costs on my end. Of course, if it's
a question of my costs going up tremendously, that's the only time
I'll raise cigar prices. I have this philosophy that I make a good
cigar, a quality cigar, at a price that most people can afford.

CA: What happens if hotels or restaurants, which are
getting more and more into offering cigars, want to sell your cigar?
Do you sell to hotels and restaurants?

Carrillo: We haven't. We sell mostly to retailers and to
wholesalers.

CA: I've heard stories where a retailer, who is not one of
your 178, will go into a store, buy five boxes at--I'm making up the
number, but let's say, $80 for the box. Takes it to his store, marks
it up to $150 or whatever, and sells it. So it's like a double markup
because customers want your cigar.

Carrillo: That's one of the biggest problems I have. I
mean, I have had a lot of problems during my years making cigars. But
I find this to be one of the biggest problems, where you have people
charging excessive amounts, especially when I am trying to sell the
cigar as low as I can at a decent price. And we see that people are
charging 12, 15, 20, 22 dollars for, let's say, a torpedo. It makes me
sick. I don't think it's fair for the consumer, and I don't think
consumers should pay this price unless it's priced that way
originally.

CA: Is there any way to characterize the retailers who do
get your cigars? Are they the old-line, top retailers?

Carrillo: Yes, places like Mike's in Miami, Holt's in
Philadelphia, Arnold's in New York, Jack Schwartz in Chicago. They
were the ones that started with us, and they're loyal to us and we're
loyal to them.

CA: Your number two brand after La Gloria is El Rico
Habano. Is that less expensive?

Carrillo: Yes.

CA: How much less? Ten, 20 percent?

Carrillo: About 10 percent.

CA: Are you going to increase production of that brand?

Carrillo: We're going to be increasing the production,
because that cigar is selling very well. That's an old Nicaraguan
blend of tobacco, except for the wrapper, which is from Ecuador. It's
full of body. I think that once people start smoking a cigar--let's
say they're starting with a mild cigar--they want to move to something
a little stronger, like El Rico, which would be a full-bodied
cigar. And that's starting to sell very well. We haven't exposed it to
the public so much because we've been tied up with La Gloria.

CA: What other brands do you make?

Carrillo: We make La Hoja Selecta, which is a mild
cigar. Then a couple of months ago we started making Dos Gonzales,
which is another brand that was very popular. It was one of the first
brands made in the Dominican Republic.

CA: And all of these are distributed wherever you sell La
Gloria? You don't have any exclusivity with anyone in terms of these
brands?